Why Anti-Competitive Behavior by Businesses is not Morally Justifiable from a Business Ethics Perspective

Abstract

This thesis will argue anti-competitive behavior by businesses is not morally justifiable from a business ethics perspective. After I have shown the two dominant theories in business ethics, shareholder theory and stakeholder theory, come up short in providing a meaningful analysis of anti-competitive behavior, I argue the market failures approach by Heath is the right approach to evaluate the moral justifiability of anti-competitive behavior. Friedman’s shareholder theory has the drawback of focusing too much on the fiduciary relationship between executive and stockholder. While Friedman believes in moral constraints based on freedom, the shareholder theory has little to say about anti-competitive business practices. Stakeholder theory has the drawback of having to compare all those who have a stake in a certain decision. This gives rise to problems of evaluation and weighing and is therefore unclear in its conclusions. The market failures approach is more useful, it draws its moral constrains from the moral justification of the market, efficiency. According to this approach businesses have a duty not to act in ways that decrease this efficiency, which means not to profit from market failures. As anti-competitive behavior aims to make the market less efficient for the benefit of the actor, it is not morally justifiable.